Final answer:
The true statement about tax basis and accounting basis of loss carryforwards is that they create taxable temporary differences. The accounting basis may reflect a loss as an asset for future benefit, whereas the tax basis is the allowable amount to reduce future taxes.
Step-by-step explanation:
The correct statement about the tax basis and accounting basis of loss carryforwards is that 'Loss carryforwards result in taxable temporary differences.' This means that there is a difference between the company's taxable income and its accounting income, due to the loss being carried forward to offset future taxable income. The accounting basis typically reflects the loss as an asset, the 'future economic benefit' resulting from the loss carryforward, while the tax basis - the amount of loss that can actually be used to reduce future taxable income for tax purposes - could be different, depending on tax laws and regulations.
Statement B suggests that the accounting basis is nil, which is not necessarily true; losses can be recognized as deferred tax assets in accounting. Statement C, 'The tax basis of the loss is the amount of the non-capital loss that may be carried forward,' is correct in defining what tax basis is, but it does not address the comparison with the accounting basis directly. Lastly, statement D is incorrect because unused non-capital losses can indeed be carried forward for tax purposes, subject to certain rules and limitations set by tax authorities.